By: JP Josephson, Director of Florida Acquisitions
It is impossible for Orlando to fully realize the enormous benefits of its fast-growing population, its quickly expanding tourism sector, or the ever-growing tech industry, or the improvements being made to Downtown Orlando (which I discussed in my previous two posts), without taking a deeper look at the recent massive investments into its infrastructure. In my final post for this series, I examine the impact that Orlando’s improved infrastructure continues to have on today’s real estate market while looking at how it will shape the future of this market.
On the Road to Growth
As Orlando continues to lead the country in population and job growth, its downtown continues to transform into a 24/7 city. Orlando’s recent accomplishments include:
- First in the nation in population growth over last five years and is projected to remain number one in the country over the next five years
- Number one in job growth in 2016
- Number two most competitive business location as ranked by KPMG.
Over the last five years, Orlando has continually broken the previous year’s all-time tourism record (currently being named the most visited city in the US, with 66mm tourists), a trend that shows no sign of stopping. Orlando’s technology industry is the second largest business sector in the area, contributing approximately $14 billion annually to Orlando’s economy, and is set to double over the next 10 years, and Forbes even recently named Orlando one of the “Next Big Boom Towns in the United States”. To accommodate all of this growth, Orlando is currently completing or planning investments of approximately $15 billion in transportation infrastructure, competitive products and quality of life features.
Already in progress is the “I-4 Ultimate,” a $2.3 billion reconstruction of Interstate-4 between Florida’s Turnpike, through Downtown Orlando, and into Lake Mary. It encompasses widening and modernizing 21 miles of interstate highway, building, or modifying 140 bridges, adding four dynamically tolled express lanes and the reconstruction of 15 major interchanges. Also in progress is the $1.6 billion Wekiva Parkway, that runs west/southwest from Interstate 4 in Sanford and connects with the existing beltway system in Apopka near US Highway 441. There is also the Creative Village, a $1 billion development project in downtown Orlando designed around creating a dynamic, mixed-use, transit oriented neighborhood for creative professionals and students in the heart of downtown Orlando in partnership with the creation of a $207 million University of Central Florida/ Valencia College joint downtown campus.
Flight Path for Orlando
Orlando’s growth has not been limited to automobile traffic, a significant increase in visitors flying into the area, over 41 million, has made Orlando International Airport the 14th busiest in the US and 43rd in the world in terms of total passengers. It is currently undergoing a $2.9 billion capital improvement plan to expand and upgrade its facilities, the biggest expansion to date since the airport was originally built. Once completed in 2019, the recently approved South Terminal, will increase the capacity of the current terminal from the originally designed 24 million travelers to 45 million annual passengers. There are also plans to add an additional 100 gates over the next two decades.
Additionally, Orlando-Sanford International Airport offers visitors another option for visiting the city, home to seven airlines traveling to 75 destinations, which handled a record 2.2 million passengers in 2015 (a 13.5 percent increase from 2014 and almost double since 2010). It was recently named Orlando Style’s Number One Airport for Airport Experience.
On The Right Track
The final piece of Orlando’s infrastructure plans centers on improving the city’s rail connectivity to the surrounding counties and cities. Orlando opened its first passenger rail system called SunRail in 2014. It is a 61.5-mile commuter rail line that connects four counties (Volusia, Seminole, Orange, and Osceola) and the City of Orlando with 17 stations. This $1.2 billion commuter rail line has the potential to create an estimated $4.6 billion in economic growth while creating opportunities for transit-oriented development projects adjacent to stations.
Finally, there is the $3 billion “All Aboard Florida” project, recently renamed Brightline. It is a privately-owned and operated intercity passenger rail service that will link South Florida to Central Florida. The route will feature passenger service between Miami and the Space Coast and will also include the creation of a link to Orlando/Central Florida. “All Aboard Florida” is expected to create 10,000 construction jobs and 500 permanent jobs from operations. Service is expected to begin between West Palm Beach and Miami by mid-2017, with Orlando service thereafter.
Orlando’s economic engine is firing on all cylinders. It is a dynamic business climate that continues to diversify far beyond its tourism roots. Forbes ranks Orlando number two for job growth and Moody’s ranks it number one for projected job growth over the next five years. CNN lists Orlando as a top 10 city for relocation in the United States. Movoto calls Orlando the second most creative city in America. UCF ranks among the nation’s top research institutions (along with MIT, Harvard, Stanford, and Johns Hopkins) and operates as an incredible feeder engine between employers and prospective employees. Local institutions such as Valencia College, Full Sail university and Rollins College further increase Orlando’s highly educated workforce ready to contribute in a wide range of fields and occupations.
With no state or city income tax, lower costs of living and doing business and the availability of a highly trained and innovative workforce, Orlando truly has a bright future with very solid growth fundamentals.
That is why at Denholtz, we are actively acquiring and expanding our footprint in the Orlando area through strategically targeted investments. Our 2017 acquisition of a 256,000-square-foot industrial park named Cypress Park in the Orlando Central Park South area exemplifies our continued strategy in this marketplace. Cypress Park joins our Orlando portfolio which also includes 100 E. Pine Street, an 80,000-square-foot office
building in downtown Orlando and University Corporate Center, a 130,000-square-foot industrial property in Winter Park. We continue to aggressively search for real estate opportunities in this exciting marketplace and look forward to being active participants in the continued growth of the city of Orlando.
If you are interested in learning more about the Orlando submarket and potential commercial real estate opportunities, in Orlando or other submarkets in Florida, please feel free to contact me at email@example.com.